TMI Blog2006 (1) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... court. Hence, we dismiss the above tax case - - - - - Dated:- 20-1-2006 - Judge(s) : P. D. DINAKARAN., P. P. S. JANARTHANA RAJA. JUDGMENT The judgment of the court was delivered by P.P.S. Janarthana Raja J.- The present appeals are filed under section 260A of the Income-tax Act, 1961 by the Revenue, against the order dated July 29, 2004, in I.T.A. Nos. 2075 and 2076 (Mds)/96 passed by the Income-tax Appellate Tribunal, Madras "C" Bench, raising the following substantial question of law: "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the contract entered into by the assessee was a mere contract of hire of ships and would therefore not fall within the purview of section 194C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. Aggrieved by the order of the Commissioner of Income-tax (Appeals), the Revenue took up the matter on appeal before the Appellate Tribunal. The Appellate Tribunal dismissed the Revenue's appeal by confirming the order of the Commissioner of Income-tax (Appeals) that the contract in question being a contract for hire of ships would not fall within the purview of section 194C of the Act. Learned counsel appearing for the Revenue submitted that, admittedly, the assessee hired the ships belonging to other shipping companies for the purpose of transport of coal from one port to another, and therefore, Circular No. 681 dated March 8, 1994 (see [1994] 206 ITR (St.) 299), of the Central Board of Direct Taxes is squarely applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payment of hire charges and it was utilised in the business of the assessee at their own discretion. It is not the case of the Revenue that the assessee entered into the said contract with the shipping company for transport of coal from one place to another. The hiring of ships for the purpose of using the same in the assessee's business would not amount to a contract for carrying out any work as contemplated in section 194C. The term "hire" is not defined in the Income-tax Act. So, we have to take the normal meaning of the word "hire". Normal hire is a contract by which one gives to another temporary possession and use of the property other than money for payment of compensation and the latter agrees to return the property after the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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